WJU Fraud Allegations Detailed

Agency Says McAteer Misused Federal Funds Sent to University

April 15, 2012

WHEELING - J. Davitt McAteer has been accused by a NASA fraud investigator of conspiring with Wheeling Jesuit University to use millions of federal grant dollars for personal gain and the school's benefit.

The allegations are contained in an affidavit that an agent in the NASA Office of Inspector General used to obtain search warrants in an active criminal investigation against McAteer and his alma mater and current employer, Wheeling Jesuit University.

Court records on file with the U.S. District Court in Wheeling show investigators believe McAteer and the school fraudulently billed expenses to federal grant programs or cooperative agreements from 2005 through 2011.

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The sworn affidavit by an agent who works at NASA's Goddard Space Center in Greenbelt, Md., said those expenses range from McAteer's salary - which surged from $130,300 in 2006 to $230,659 by 2008 - to cellphones, computers, technical support and salaries for other staff, including a secretary in McAteer's Shepherdstown private law office.

McAteer is an internationally known expert on mine safety and a former head of the federal Mine Safety and Health Administration. He was hand-picked by West Virginia's former governor, U.S. Sen. Joe Manchin, to oversee thorough, independent investigations of three coal mine disasters since 2006. The Sago Mine explosion trapped and killed 12 men in January 2006, while the Alma No. 1 mine fire weeks later killed two more. McAteer also issued the first report on the 2010 Upper Big Branch explosion, which killed 29.

The reports he authored are now among the evidence that federal investigators are studying. Among the search warrant requests were "any and all documents" relating to work done on those three reports, including financial documents, travel expenses, time cards and interview notes.

In examining five NASA grants, the agent found the duties and salaries of individuals "did not, in any way, benefit the substantive work being done on the federal award projects."

"The motive for (McAteer's) actions is evidenced by the substantial sum of money (Wheeling Jesuit) improperly received," the agent concluded.

The university may have been complicit in five possible federal crimes: theft of federal funds; major fraud; conspiracy; false claims; and wire fraud, the document said.

McAteer's attorney, Stephen Jory, did not immediately return a message seeking comment. University spokeswoman Michelle Rejonis said she has not seen the document and could not comment.

"With regards to the investigation, we continue to cooperate with federal authorities. Because the investigation is still ongoing, any further comment would be speculative," Rejonis said.

The Most Rev. Michael J. Bransfield, Bishop of the Roman Catholic Diocese of Wheeling-Charleston, said Saturday he has no personal knowledge of the situation at Jesuit, noting he does not serve on the university's board of directors. He said he knows of McAteer from his work investigating the mining accidents.

"My hope is that this can be worked out," Bransfield said, noting he believes university President Richard Beyer is a "very smart man who will get to the bottom of this."

Beyer could not be immediately reached for comment Saturday.

In recent years, Bransfield has fostered a stronger relationship between the diocese and WJU. Last year, the diocese awarded a $1.2 million grant to the university "to boost enrollment and facilitate growth" in the WJU health sciences program.

The investigation has been under way since May 2010, involving the U.S. Department of Labor's Office of Inspector General, the Office of Labor, Racketeering and Fraud Investigations, and the National Science Foundation's Office of Inspector General, according to the affidavit.

The document also suggested there's evidence to suggest that MSHA - the agency McAteer ran from 1992 to 2000 - was also defrauded. Among the titles McAteer has held at Wheeling Jesuit was director of the school's Coal Impoundment Project, designed to inform the public of locations of massive coal waste dams.

The affidavit blacks out all names but clearly identifies McAteer as the author of three reports on high-profile coal mine disasters and the book, "Monongah: The Tragic Story of the 1907 Monongah Mine Disaster, The Worst Industrial Accident in U.S. History." McAteer wrote the book, which was published in 2007.

The affidavit identifies the university as the institution in Wheeling that was founded in 1954 between the Catholic Diocese of Wheeling-Charleston and the Society of Jesus of the Maryland Province. Wheeling Jesuit University recounts its history the same way on its website.

At least twice, the affidavit said, witnesses interviewed for the investigation warned both McAteer and the school that they were breaking the law. A consulting firm hired in 2008 also made similar warnings, the document said.

"We will slowly work on making this right, but we can't afford to do it at this time," McAteer is said to have told top university officials in response to the consulting firm's conclusion, according to the affidavit.

McAteer also is director of the Robert C. Byrd National Technology Transfer Center and Wheeling Jesuit's Erma Ora Byrd Center for Education Technologies, which is named for the wife of the late longtime U.S. Sen. Robert C. Byrd.

The technology transfer center does work on mine safety and health, missile defense, health technology and small business partnerships. The Center for Educational Technologies has housed the NASA-sponsored "Classroom of the Future" program since 1990. The space agency began construction of the center in 1993 and later helped build the educational technologies center.

Between fiscal years 2000 and 2009, NASA gave Wheeling Jesuit more than $116 million, more than $65 million of that after McAteer took over the school's Sponsored Programs Office in 2005.

A finance manager in that office told the investigator that McAteer created the Combined Cost Management Service Center when he took over. Merging the billing of the two centers allowed him "to control and consolidate all the expenses, regardless of whether such expenses were related to the federal awards."

The affidavit calls the handling of federal dollars at Wheeling Jesuit "arbitrary and fraudulent," and cites a 2007 incident in which the Missile Defense Agency "expressed outrage" that McAteer and others weren't working on the agency's program but were still billing 6 percent of the center's expenses to the grant.

In 2008, an unidentified witness sent then-university president the Rev. Julio Giulietti a letter outlining his concerns that McAteer wanted to charge 75 percent of his salary to the Sponsored Programs Office and 25 percent to the school.

"I cannot legally do this," the employee wrote in a letter marked personal and confidential that was cited in the affidavit. "...These matters concern me professionally, ethically and legally."

When Giulietti was fired in August 2009, McAteer replaced him as interim president and served until January 2011, when Beyer began work. The school's board never publicly said why Giulietti was let go.